NBTY posts modest rise in Q3 sales, proposed settlement of glucosamine lawsuits up for court approval in September

By Elaine WATSON

- Last updated on GMT

NBTY has agreed on a proposed settlement of class action lawsuits over the marketing of its glucosamine supplements which "resolves all pending claims without any admission of or concession of liability"
NBTY has agreed on a proposed settlement of class action lawsuits over the marketing of its glucosamine supplements which "resolves all pending claims without any admission of or concession of liability"

Related tags: Net sales, Revenue, Class action, Nbty

Supplements giant NBTY generated modest sales growth in the third quarter of 2013, with strong growth in branded supplements partially offset by a decline in private label and contract manufacturing sales.

On an earnings call this morning, CEO Jeff Nagel said:“According to Nielsen data for the 13 weeks to June 29 overall sales of VHMS (vitamins, herbs, mineral and supplements) products in all outlets were up by 7% while NBTY branded sales outperformed the industry with growth of 8%.

“We had particular success in our brand-building efforts for key brands such as Osteo Bi-Flex, our primary joint care brand. Through reinvigorated marketing and related distribution gains we were able to gain three points of share and produce 8% point of sale growth, which is 11% ahead of the overall category growth.

“We also saw increased demand in the sports nutrition category.”

Results breakdown 

NBTY

NBTY posted net earnings of $51.3m in the three months to June 30, compared with $41.2m in the same period in 2012. Net sales were up 2.6% to $802.8m.

Net sales in its Wholesale​ division (which supplies branded and private label products for leading retailers) were up 1.9% to $489.2m in the quarter, said Nagel, with a $34m increase in sales of branded products partially offset by $25m lower net sales of certain contract manufacturing and private label products.  

Net sales in the European Retail​ arm (which includes Holland & Barrett in the UK, De Tuinen in Netherlands, Essenza in Belgium and Nature’s Way in Ireland) were up 8.6% to $191.7m.

Net sales in the direct Response/E-Commerce​ channel were down 4.1% to $63.7m.

North American Retail​ net sales (Vitamin World) were down 1.9% to $58.2m.

NBTY, which recently acquired nutritional bar maker Balance Bar and Belgian retailer Essenza, is making good progress on a restructuring plan that will involve the sale or closure of seven of its manufacturing/packaging and distribution facilities. This should be completed in fiscal 2014, said Nagel.

Update on glucosamine class action lawsuits

gavel-legal-istock

In an update on class action lawsuits filed against NBTY challenging the marketing of its glucosamine-based supplements, NBTY said it had agreed on a proposed settlement with the plaintiffs “which includes all cases and resolves all pending claims without any admission of or concession of liability by NBTY”. ​Click here for details. 

It added: “The parties have signed settlement documentation providing for a release of all claims in return for payments to the class, together with attorneys' fees, and notice and administrative costs estimated to be in the range of $8,000 to $15,000 has been preliminarily approved by the court and a Fairness Hearing, at which final approval by the court is anticipated, is scheduled for September 4, 2013.”

Until this settlement is approved and entered by the court, however, “no final determination can be made as to the ultimate outcome of the litigation or the amount of liability on the part of NBTY”​, it stressed.

The proposed settlement covers multiple brands containing glucosamine including Osteo Bi‐Flex and Nature's Bounty as well as several private supplements made for firms such as Kroger, Safeway and ShopRite. Click here for a full list (section A).

NBTY brands include Nature's Bounty, Ester-C, Balance Bar, Solgar, MET-Rx, American Health, Osteo Bi-Flex, Flex-A-Min, SISU, Knox, Sundown, Rexall, Pure Protein, Body Fortress, Worldwide Sport Nutrition, Natural Wealth, and Puritan's Pride.

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